Struggling upscale U.S.
retailer Neiman Marcus pulls IPO
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[January 07, 2017]
By Lauren Hirsch and Siddharth Cavale
(Reuters) - Neiman Marcus Group LLC said on
Friday it would withdraw its initial public offering, nearly two years
after the upscale department store chain filed its intent with U.S.
regulators to go public, as it grapples with weaker customer demand.
Neiman Marcus' abandoned IPO underscores the challenges facing the
high-end retailer, as the broader industry struggles under the weight of
competitive pressure from off-price stores and online retailers such as
Amazon.com Inc <AMZN.O>
Neiman Marcus declined to comment on the reasons for pulling the IPO.
Neiman Marcus, which also operates the Bergdorf Goodman and MyTheresa
brands, was acquired by private equity firm Ares Management LP <ARES.N>
and Canada Pension Plan Investment Board three years ago for $6 billion.
The Dallas-based company filed to go public in August 2015, but it soon
decided to put these plans on hold as a strong U.S. dollar hurt its
store revenue in gateway tourist destinations such as New York, Las
Vegas, Los Angeles and Hawaii.
Late 2015 through 2016 was a notably rocky period for IPOs, plagued by
market jitters and volatility. Companies only raised $19 billion through
public offerings last year, down 42 percent from $32 billion a year
As skittish investors became more concerned with companies' earnings,
some of the biggest victims of last year's IPO rut were private equity
backed, highly indebted companies such as Neiman Marcus, which had been
looking to use IPO proceeds to pay down debt.
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Shoppers browse at Neiman Marcus at The Plaza, King of Prussia Mall,
United State's largest retail shopping space, in King of Prussia,
Pennsylvania on December 6, 2014. REUTERS/Mark Makela
As of late October, Neiman Marcus had about $4.9 billion in debt, including its
asset-based revolving credit facility, much of which stemmed from its 2013
buyout. Last fall, lenders allowed it to push out a maturity on its revolving
credit line to 2021, under certain conditions, from 2018, giving the company
more time to boost sales to repay debt.
Neiman Marcus's term loan was trading below face value at about 86 cents on the
dollar on Thursday, according to Thomson Reuters data, indicating some investor
concern about the prospects of the company. Neiman Marcus' bonds, meanwhile, are
trading at 87 cents on the dollar, down about 8 percent from this time last
For the 12 months ending Sept. 26, Neiman Marcus reported $4.95 billion in
sales, a decrease of 2.9 percent from the year prior. It also reported a net
loss of $406 million, as compared to net earnings of $14.9 million a year
(Reporting by Lauren Hirsch in New York; Additional reporting by Jessica
DiNapoli in New York; Editing by Bill Trott)
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